The next release is scheduled for Friday, August 15, 2014 at 10:00 A.M. (KST) In the U.S Thursday, August 14, 2014 at 9:00 P.M.

Transcription

1 FOR RELEASE: 10:00 A.M. KST, FRIDAY, JULY 11, 2014 The Conference Board Korea Business Cycle Indicators SM THE CONFERENCE BOARD LEADING ECONOMIC INDEX (LEI) FOR KOREA AND RELATED COMPOSITE ECONOMIC INDEXES FOR MAY 2014 The Conference Board Leading Economic Index (LEI) for Korea declined 0.6 percent and The Conference Board Coincident Economic Index (CEI) for Korea declined 0.5 percent in May. The Conference Board LEI for Korea fell in May after three consecutive gains. A large negative contribution from the value of machinery orders component was the primary driver behind the decline. With May s decrease, the leading economic index contracted by 0.1 percent (about a -0.2 percent annual rate) between November 2013 and May 2014, down from the increase of 1.7 percent (about a 3.5 percent annual rate) over the previous six months. Additionally, the weaknesses among the leading indicators have become slightly more widespread than the strengths in recent months. The Conference Board CEI for Korea, a measure of current economic activity, also declined in May. Between November 2013 and May 2014, the coincident economic index grew by 0.3 percent (about a 0.7 percent annual rate), slower than the 1.3 percent increase (about a 2.6 percent annual rate) during the previous six months. At the same time, real GDP grew at a 3.8 percent annual rate in the first quarter of this year, slightly up from 3.6 percent growth (annual rate) in the last quarter of The LEI for Korea has decreased in May, and as a result its six-month change has slipped into negative territory for the first time since September Meanwhile, the CEI for Korea also declined in May, and its six-month growth rate has slowed substantially compared to earlier this year. Taken together, the weakening in both the LEI and CEI and their components suggests that the rate of economic growth is unlikely to pick up in the near term. LEADING INDICATORS. Four of the seven components that make up The Conference Board LEI for Korea increased in May. The positive contributors from the largest positive contributor to the smallest were real exports FOB, the (inverted) yield of government public bonds, letter of credit arrivals, and stock prices. Negative contributors from the largest negative contributor to the smallest were value of machinery orders, the (inverted) index of inventories to shipments and private construction orders. With the 0.6 percent decrease in May, The Conference Board LEI for Korea now stands at (2004=100). Based on revised data, this index increased 1.0 percent in April and increased 0.8 percent in March. Over the six-month span through May, the leading economic index decreased 0.1 percent, with three of the seven components advancing (diffusion index, six-month span equals 42.9 percent). The next release is scheduled for Friday, August 15, 2014 at 10:00 A.M. (KST) In the U.S Thursday, August 14, 2014 at 9:00 P.M. (EDT)

2 -2- COINCIDENT INDICATORS. Only one of the four components that make up The Conference Board CEI for Korea increased in May. The positive contributor was the wholesale and retail sales component. Total employment, industrial production and monthly cash earnings* declined in May. With the 0.5 percent decrease in May, The Conference Board CEI for Korea now stands at (2004=100). Based on revised data, this index decreased 0.1 percent in April and decreased 0.7 percent in March. During the six-month span through May, the coincident economic index increased 0.3 percent, with two of the four components advancing (diffusion index, six-month span equals 50.0 percent). FOR TABLES AND CHARTS, SEE BELOW DATA AVAILABILITY. The data series used to compute The Conference Board Leading Economic Index (LEI) and The Conference Board Coincident Economic Index (CEI) for Korea reported in this release are those available as of 3 P.M. (ET) on July 9, * The series in the coincident economic index based on The Conference Board s estimates is monthly cash earnings. There is no forecasted series in the leading economic index. Professional Contacts at The Conference Board: Media Contacts: Indicator Program: indicators@conference-board.org Carol Courter: Jonathan Liu: Website: THE CYCLICAL INDICATOR APPROACH. The composite economic indexes are the key elements in an analytic system designed to signal peaks and troughs in the business cycle. The Conference Board LEI and CEI are essentially composite averages of several individual leading or coincident economic indicators. (See page 3 for details.) They are constructed to summarize and reveal common turning point patterns in economic data in a clearer and more convincing manner than any individual component primarily because they smooth out some of the volatility of individual components. Historically, the cyclical turning points in The Conference Board LEI have occurred before those in aggregate economic activity, while the cyclical turning points in The Conference Board LEI have occurred at about the same time as those in aggregate economic activity.

3 -3- Korea Composite Indexes: Components and Standardization Factors Leading Economic Index Factor 1. Stock Prices Value of Machinery Orders Letter of Credit Arrivals Index of Inventories to Shipments Export FOB Yield of Government Public Bonds Private Construction Orders Coincident Economic Index 1. Industrial Production Wholesale and Retail Trade Employment Monthly Cash Earnings Notes: The component factors are inversely related to the standard deviation of the month-to-month changes in each component. They are used to equalize the volatility of the contribution from each component and are normalized to sum to 1. These factors were revised effective with the release in January 2014, and all historical values for the two composite economic indexes were revised at this time to reflect the changes. (Under normal circumstances, updates to The Conference Board LEI and CEI only incorporate revisions to data over the past six months.) The factors above for The Conference Board LEI were calculated using as the sample period for measuring volatility. A separate set of factors for the , , , and periods, are available upon request. The factors above for The Conference Board CEI were calculated using as the sample period. These multiple sample periods are the result of different starting dates for the component data. When one or more components are missing, the other factors are adjusted proportionately to ensure that the total continues to sum to 1. For additional information on the standardization factors and the index methodology visit our Web site: The trend adjustment factors for The Conference Board LEI are (calculated from June 1980 to December 2012) and (calculated from March 1971 to May 1980). To address the problem of lags in available data, those leading and coincident economic indicators that are not available at the time of publication are estimated using statistical imputation. An autoregressive model is used to estimate each component. The resulting indexes are constructed using real and estimated data, and will be revised as the data unavailable at the time of publication become available. Such monthly data revisions are now a regular part of the U.S. Business Cycle and Global Indicators program. The main advantage of this procedure is to utilize in The Conference Board LEI the data such as bond yields, stock prices, and change in consumer confidence that are available sooner than other data on real aspects of the economy such as housing starts and new orders. Empirical research by The Conference Board suggests there are real gains in adopting this procedure to make all the indicator series as up-to-date as possible.

4 NOTICES The 2014 schedule for The Conference Board Leading Economic Index (LEI) for Korea news releases is: Thursday, August 14, 2014 Thursday, September 11, 2014 Wednesday, October 15, 2014 Thursday, November 13, 2014 Thursday, December 11, 2014 For June 2014 data For July 2014 data For August 2014 data For September 2014 data For October 2014 data All releases are at 10:00 A.M. KST (following day), 8:00 P.M. (9:00 P.M. EDT) ET ABOUT THE CONFERENCE BOARD The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: to provide the world s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the U.S. For additional information about The Conference Board and how it can meet your needs, visit our website at AVAILABLE FROM THE CONFERENCE BOARD: Korea Business Cycle Indicators Internet Subscription (Includes monthly release, data, charts and commentary) $ 714 (for TCB members)/$ 908 (for non-tcb members) per year (1 user) Individual Data Series $ 68 per series downloaded Monthly BCI Report (PDF) (Sample available at $ 289 (for TCB members)/$ 357 (for non-tcb members) per year BCI Handbook (published 2001) Corporate Site License PDF only website download Contact Indicators Program at indicators@conference-board.org Business Cycle Indicators for China, the Euro Area, France, Germany, India, Japan, Korea, Mexico, Spain, the U.K, and the U.S. are available at $714 (for TCB members)/$908 (for non-tcb members) per country per year (1 user). Discounts are available to accredited academic institutions.

5 The Conference Board Leading Economic Index (LEI) and The Conference Board Coincident Economic Index (CEI) for Korea Table 1.- Summary of Korea Composite Economic Indexes Nov. Dec. Jan. Feb. Mar. Apr. May Leading index r r Percent change r 1.0 r -0.6 Diffusion index Coincident index r p p Percent change r -0.1 p -0.5 p Diffusion index May to Jun to Jul to Aug to Sep to Oct to Nov to Nov Dec Jan Feb Mar Apr May Leading index Percent change r 1.7 r Diffusion index Coincident index Percent change r 1.2 p 0.3 p Diffusion index p Preliminary. r Revised (noted only for index levels and one-month percent changes). CALCULATION NOTE: The diffusion indexes measure the proportion of the components that are rising. Components that rise more than 0.05 percent are given a value of 1.0, components that change less than 0.05 percent are given a value of 0.5, and components that fall more than 0.05 percent are given a value of 0.0. For more information, visit our Web site at w w w.conference-board.org/data/bci.cfm Source: The Conference Board All Rights Reserved The Conference Board All data contained in this table are protected by United States and international copyright laws. The data displayed are provided for informational purposes only and may only be accessed, reviewed, and/or used in accordance with, and the permission of, The Conference Board consistent with a subscriber or license agreement and the Terms of Use displayed on our website at The data and analysis contained herein may not be used, redistributed, published, or posted by any means without express written permission from The Conference Board. COPYRIGHT TERMS OF USE. All material in this data table, this press release, and on Our Sites are protected by United States and international copyright laws. You must abide by all copyright notices and restrictions contained in Our Sites. You may not reproduce, distribute (in any form including over any local area or other network or service), display, perform, create derivative works of, sell, license, extract for use in a database, or otherwise use any materials (including computer programs and other code) in this data table, this press release, and on Our Sites (collectively, Site Material ), except that you may download Site Material in the form of one machine readable copy that you will use only for personal, noncommercial purposes, and only if you do not alter Site Material or remove any trademark, copyright or other notice displayed on the Site Material. If you are a subscriber to any of the services offered on Our Sites, you may be permitted to use Site Material, according to the terms of your subscription agreement. TRADEMARKS. THE CONFERENCE BOARD, the TORCH LOGO, "THE CONFERENCE BOARD LEADING ECONOMIC INDEX", THE CONFERENCE BOARD COINCIDENT ECONOMIC INDEX", THE CONFERENCE BOARD LAGGING ECONOMIC INDEX", and any other logos, indicia and trademarks featured in this data table, this press release, or on Our Sites are trademarks owned by The Conference Board, Inc. in the United States and other countries ( Our Trademarks ). You may not use Our Trademarks in connection with any product or service that does not belong to us or in any manner that is likely to cause confusion among users about whether The Conference Board is the source, sponsor, or endorser of the product or service, nor in any manner that disparages or discredits us. Violators of these rights will be prosecuted to the full extent of the law. Nothing herein shall restrict the use of the information by news journalists using the information in a legitimate news publication or periodical.

6 The Conference Board Leading Economic Index (LEI) and The Conference Board Coincident Economic Index (CEI) for Korea Table 2.- Data and Net Contributions for Components of The Conference Board Leading Economic Index (LEI) for Korea Components Nov. Dec. Jan. Feb. Mar. Apr. May Korea Leading Economic Index Component Data Stock Price Index, (Dec-04-80=100) Value of Machinery Orders, Mfg. (Bill Won, SA,) r r r r r r Letter of Credit Arrivals, Mfg. (3 Month Moving avg., Mill US$, SA) r r r r r r Index of Inventories to Shipments, Mfg.,* (2010=100, S.A.) r r r r r r Real Exports FOB, Customs Clearance Basis, (3 Month Moving avg., US $ Million, SA) r Yield of Government Public Bonds,* Maturity up to 5 Years, (Percent) Private Construction Orders (Bill. Of Won deflated by PPI, 3MA, SA) r r r r r r LEADING INDEX (2004=100) r r Percent change from preceding month r 1.0 r -0.6 Korea Leading Economic Index Component Contributions Stock Price Index, (Dec-04-80=100) Value of Machinery Orders, Mfg. (Bill Won, SA,) r r 0.02 r 0.43 r Letter of Credit Arrivals, Mfg. (3 Month Moving avg., Mill US$, SA) r r 0.02 Index of Inventories to Shipments, Mfg.,* (2010=100, S.A.) r r r 0.62 r r Real Exports FOB, Customs Clearance Basis, (3 Month Moving avg., US $ Million, SA) Yield of Government Public Bonds,* Maturity up to 5 Years, (Percent) Private Construction Orders (Bill. Of Won deflated by PPI, 3MA, SA) r r r 0.47 r p Preliminary. r Revised. * Inverted series; a negative change in this component makes a positive contribution to the index. ** Statistical Imputation (See page 2 for more details) Q Quarterly series; these series are converted to a monthly series through a linear interpolation. Data Sources: Korea National Statistics Office, The Bank of Korea, Korean Customs Administration, Haver Analytics CALCULATION NOTE--The percent change in the index does not alw ays equal the sum of the net contributions of the individual components (because of rounding effects and base value differences). The Conference Board All data contained in this table are protected by United States and international copyright laws. The data displayed are provided for informational purposes only and may only be accessed, reviewed, and/or used in accordance with, and the permission of, The Conference Board consistent with a subscriber or license agreement and the Terms of Use displayed on our website at The data and analysis contained herein may not be used, redistributed, published, or posted by any means without express written permission from The Conference Board. COPYRIGHT TERMS OF USE. All material in this data table, this press release, and on Our Sites are protected by United States and international copyright laws. You must abide by all copyright notices and restrictions contained in Our Sites. You may not reproduce, distribute (in any form including over any local area or other network or service), display, perform, create derivative works of, sell, license, extract for use in a database, or otherwise use any materials (including computer programs and other code) in this data table, this press release, and on Our Sites (collectively, Site Material ), except that you may download Site Material in the form of one machine readable copy that you will use only for personal, noncommercial purposes, and only if you do not alter Site Material or remove any trademark, copyright or other notice displayed on the Site Material. If you are a subscriber to any of the services offered on Our Sites, you may be permitted to use Site Material, according to the terms of your subscription agreement. TRADEMARKS. THE CONFERENCE BOARD, the TORCH LOGO, "THE CONFERENCE BOARD LEADING ECONOMIC INDEX", THE CONFERENCE BOARD COINCIDENT ECONOMIC INDEX", THE CONFERENCE BOARD LAGGING ECONOMIC INDEX", and any other logos, indicia and trademarks featured in this data table, this press release, or on Our Sites are trademarks owned by The Conference Board, Inc. in the United States and other countries ( Our Trademarks ). You may not use Our Trademarks in connection with any product or service that does not belong to us or in any manner that is likely to cause confusion among users about whether The Conference Board is the source, sponsor, or endorser of the product or service, nor in any manner that disparages or discredits us. Violators of these rights will be prosecuted to the full extent of the law. Nothing herein shall restrict the use of the information by news journalists using the information in a legitimate news publication or periodical.

7 The Conference Board Leading Economic Index (LEI) and The Conference Board Coincident Economic Index (CEI) for Korea Table 3.- Data and Net Contributions for Components of The Conference Board Coincident Economic Index (CEI) for Korea Components Nov. Dec. Jan. Feb. Mar. Apr. May Korea Coincident Economic Index Component Data Industrial Production, (2010=100, SA) r Wholesale and Retail Sales, (2010=100, SA) r r Total Employment, (Thousands of Persons, SA) Monthly Cash Earnings (Hundres of Won, deflated by CPI, SA) ** ** ** COINCIDENT INDEX (2004=100) p p p Percent change from preceding month p -0.1 p -0.5 p Industrial Production, Korea Coincident Economic Index Component Contributions (2010=100, SA) r r Wholesale and Retail Sales, (2010=100, SA) r r 0.18 Total Employment, (Thousands of Persons, SA) Monthly Cash Earnings (Hundres of Won, deflated by CPI, SA) ** 0.13 ** ** p Preliminary. r Revised. n.a. Not available. c Corrected. ** Statistical Imputation (See page 2 for more details) Q Quarterly series; these series are converted to monthly through a linear interpolation. Data Sources: Korea National Statistics Office, Haver Analytics, Ministry of Labor CALCULATION NOTE--The percent change in the index does not alw ays equal the sum of the net contributions of the individual components (because of rounding effects and base value differences). The Conference Board All data contained in this table are protected by United States and international copyright laws. The data displayed are provided for informational purposes only and may only be accessed, reviewed, and/or used in accordance with, and the permission of, The Conference Board consistent with a subscriber or license agreement and the Terms of Use displayed on our website at The data and analysis contained herein may not be used, redistributed, published, or posted by any means without express written permission from The Conference Board. COPYRIGHT TERMS OF USE. All material in this data table, this press release, and on Our Sites are protected by United States and international copyright laws. You must abide by all copyright notices and restrictions contained in Our Sites. You may not reproduce, distribute (in any form including over any local area or other network or service), display, perform, create derivative works of, sell, license, extract for use in a database, or otherwise use any materials (including computer programs and other code) in this data table, this press release, and on Our Sites (collectively, Site Material ), except that you may download Site Material in the form of one machine readable copy that you will use only for personal, noncommercial purposes, and only if you do not alter Site Material or remove any trademark, copyright or other notice displayed on the Site Material. If you are a subscriber to any of the services offered on Our Sites, you may be permitted to use Site Material, according to the terms of your subscription agreement. TRADEMARKS. THE CONFERENCE BOARD, the TORCH LOGO, "THE CONFERENCE BOARD LEADING ECONOMIC INDEX", THE CONFERENCE BOARD COINCIDENT ECONOMIC INDEX", THE CONFERENCE BOARD LAGGING ECONOMIC INDEX", and any other logos, indicia and trademarks featured in this data table, this press release, or on Our Sites are trademarks owned by The Conference Board, Inc. in the United States and other countries ( Our Trademarks ). You may not use Our Trademarks in connection with any product or service that does not belong to us or in any manner that is likely to cause confusion among users about whether The Conference Board is the source, sponsor, or endorser of the product or service, nor in any manner that disparages or discredits us. Violators of these rights will be prosecuted to the full extent of the law. Nothing herein shall restrict the use of the information by news journalists using the information in a legitimate news publication or periodical.

8 Korea Composite Economic Indexes /97 7/98 1/08 12/08 The Conference Board Leading Economic Index (LEI) for South Korea 110 Index (2004 = 100) May ' The Conference Board Coincident Economic Index (CEI) for South Korea 110 Index (2004 = 100) May ' Note: The shaded areas represent business cycle recessions. The peaks and troughs are designated by The Conference Board based on the coincident index and real GDP. Source: The Conference Board The Conference Board All data contained in this table are protected by United States and international copyright laws. The data displayed are provided for informational purposes only and may only be accessed, reviewed, and/or used in accordance with, and the permission of, The Conference Board consistent with a subscriber or license agreement and the Terms of Use displayed on our website at The data and analysis contained herein may not be used, redistributed, published, or posted by any means without express written permission from The Conference Board. COPYRIGHT TERMS OF USE. All material in this data table, this press release, and on Our Sites are protected by United States and international copyright laws. You must abide by all copyright notices and restrictions contained in Our Sites. You may not reproduce, distribute (in any form including over any local area or other network or service), display, perform, create derivative works of, sell, license, extract for use in a database, or otherwise use any materials (including computer programs and other code) in this data table, this press release, and on Our Sites (collectively, Site Material ), except that you may download Site Material in the form of one machine readable copy that you will use only for personal, noncommercial purposes, and only if you do not alter Site Material or remove any trademark, copyright or other notice displayed on the Site Material. If you are a subscriber to any of the services offered on Our Sites, you may be permitted to use Site Material, according to the terms of your subscription agreement. TRADEMARKS. THE CONFERENCE BOARD, the TORCH LOGO, "THE CONFERENCE BOARD LEADING ECONOMIC INDEX", THE CONFERENCE BOARD COINCIDENT ECONOMIC INDEX", THE CONFERENCE BOARD LAGGING ECONOMIC INDEX", and any other logos, indicia and trademarks featured in this data table, this press release, or on Our Sites are trademarks owned by The Conference Board, Inc. in the United States and other countries ( Our Trademarks ). You may not use Our Trademarks in connection with any product or service that does not belong to us or in any manner that is likely to cause confusion among users about whether The Conference Board is the source, sponsor, or endorser of the product or service, nor in any manner that disparages or discredits us. Violators of these rights will be prosecuted to the full extent of the law. Nothing herein shall restrict the use of the information by news journalists using the information in a legitimate news publication or periodical.